By David Wagman, VP of Energy Content

That the electric power sector is front and center not only in domestic policy discussions but also in the broader global geopolitical realm became increasingly clear in 2021. The resulting tensions are unlikely to ease in 2022, or for the foreseeable future.

I am watching three topics in particular: the Biden Administration’s efforts to move both infrastructure spending and broader climate and social justice goals through a deeply divided Congress; the trade tensions impacting solar due to allegations of forced labor in the supply chain and unfair trade practices by Chinese suppliers; and the continued battering of the grid by extreme weather events and human-caused disasters.

Let’s look at each in turn.

Stuck in the mud?

The image that comes to mind when I think about the Biden Administration’s domestic policy efforts is of the container ship Ever Given firmly lodged in the Suez Canal. 

Like the Ever Given, the administration loaded up an ambitious agenda and set sail. On board the S.S. Biden were initiatives to address infrastructure needs (including much-needed upgrades and expansion of the electric power grid), as well as spending for a range of ventures to tackle climate change threats and address systemic issues related to social injustice. 

The Ever Given stuck in the Suez Canal. (Image: Wikipedia)

The good ship and its crew entered treacherous waters with the U.S. Congress but succeeded in getting its massive infrastructure bill passed and signed into law. That bill is hugely significant. It represents the sort of investment in everything from ports to highways to electric power infrastructure that the United States desperately needs to compete in the years to come. The seemingly high price tag today will be more than paid for as private sector investments make use of these publicly funded investments.

But late in the year, Hurricane Manchin blew the S.S. Biden’s Build Back Better scheme off course and into the mud. Just as much of the world watched as crews worked in the Suez Canal to unstick the Ever Given, we end 2021watching to see if a consummate D.C. insider like Joe Biden can refloat his agenda. 

It’s possible that Senator Manchin could change his mind and reverse his opposition to Build Back Better. After all, the United Mine Workers publicly urged him to rethink his stance, citing multiple benefits to coal miners in general and to West Virginia’s economy in particular. 

A cloudy 2022 for solar?

A no less complex set of issues clouded the solar industry in 2021. To be sure, this was a banner year for the sector and hundreds of megawatts of new capacity were installed with gigawatts more in the development pipeline. Solar plus storage increasingly is the buzz phrase as widespread efforts to decarbonize and electrify gain momentum.

But the solar supply chain is caught up in allegations of forced labor involving the Uyghar ethnic minority in the Xinjiang region of China. In June, the Biden Administration tightened customs enforcement of solar modules coming to the U.S. and that were suspected of including components banned under forced labor statutes that date back to the 1930s.

And, on December 23, Biden signed into law the Uyghar Forced Labor Prevention Act. It carries the bald assumption that goods coming from Xinjiang are made with forced labor. That means businesses (including solar companies) will have to prove that forced labor was not used in order for goods to be allowed into the U.S.

Solar PV
Trade disputes and allegations of forced labor in the supply chain are throwing clouds over solar.

One problem for the U.S. solar industry is that it largely lacks the kind of traceability protocols that would let companies meet the new law’s requirements. It’s only been within the last year that third-party supply chain audits have been introduced. One flaw with these audits is that Beijing denies that forced labor exists in China. The government has imposed laws of its own to penalize Chinese firms that cooperate with such supply chain audits. 

On top of forced labor allegations, the solar industry is at the heart of trade disputes with Beijing over alleged unfair trade practices.

An effort last summer by a handful of domestic solar companies to get the Department of Commerce to investigate allegations of dumping was turned back last fall. The effort drew a swift response from the solar industry’s biggest trade association, which worked hard to discredit the companies’ petitions. In response, the petitioners’ lawyers charged that the Solar Energy Industries Association (SEIA) was itself being heavily influenced by Chinese manufacturing interests that hold leadership roles within the organization.

The drama highlights not only the global reliance on Chinese producers for much of the world’s solar energy equipment, but also the woeful state of U.S. domestic solar manufacturing. To be sure, companies like Arizona-based First Solar announced massive projects this year to expand U.S. production. But questions remain over the extent to which U.S. and European firms can compete with the advantages enjoyed by Chinese producers.

Around 80% of solar modules destined for U.S. projects come from China and satellite manufacturing sites in Southeast Asia. One can only imagine the uproad had OPEC ever had a similar market domination over oil supplies.

Some may argue that we shouldn’t worry too much about where solar modules are produced given the pressing need to decarbonize the electric grid and drive forward electrification across sectors such as transportation. But a cloud over solar exists, and allegations of human rights violations in the supply chain should be no less troubling as concerns over carbon emissions.

Then, too, Chinese manufacturers may decide to focus on other markets and redirect business away from the U.S. SEIA has reported evidence of such a delivery slowdown. And it, along with analyst firm Wood Mackenzie, predicted that solar’s growth rate next year could be cut by as much as much one-third as a result of trade disputes and the failure of Build Back Better to pass.

Battered and bruised?

The third big issue for me in 2021 was the increasing realization nationwide that the existing electric power grid is fragile and vulnerable to disruptions. Grid vulnerability first became evident almost 60 years ago after the first widespread blackout hit the Northeastern U.S. following an equipment failure in Upstate New York. Subsequent failures occurred and were repaired; technology advancements clearly have bolstered the bulk electric transmission and distribution grid. 

What is different in recent years, however, is how the grid’s vulnerability to disruption is less a matter of technical failures and more a function of its exposure to extreme weather events, wildfires, and human-caused disasters.

Could a microgrid with distributed solar and energy storage have benefited Louisiana when Hurricane Ida roared through? (Image: Entergy)

Texas started the year with an extended power outage after a winter storm disrupted multiple power plants across the state. The loss of life that occurred, as well as the economic disruption, was tragic. But what maddened many people was the fact that a nearly identical storm hit the state a decade earlier. Recommended fixes, including winterization measures to protect vulnerable gas-fired power plants, largely were ignored. The failure of policy makers to adequately protect Texans after the 2011 outages directly led to an even more consequential disruption in 2021.

Months later, Louisiana was hit by Hurricane Ida. The storm swept ashore in early September and knocked out most of the transmission lines that Entergy uses to bring electricity into New Orleans. Large parts of southwestern Louisiana were also left with power after hundreds of miles of transmission and distribution lines were destroyed.

Many people wondered whether the region could have eased the storm’s impact on the grid through microgrids and more distributed energy resources like rooftop solar and energy storage. One image that struck home was a photo of a toppled electric distribution pole in front of an apartment building with its roof still intact. The sun was shining, and it’s reasonable to wonder whether rooftop solar would have eased both the economic and human impacts that increasingly fierce and frequent storms will throw at the grid.

The slow but steady adoption of distributed energy resources will no doubt continue in the new year. So, too, will policy divisions and geopolitical disputes that make the electric power sector a strategic asset as never before.

This post appeared first on Power Engineering.